LEISURE group Whitbread has delivered a pensions blow to staff by announcing the closure of its final salary scheme to existing members.
The decision will affect 800 staff – about 30% of its workforce – who are currently members of the final salary fund.
But the group said it was also extending its wider pension arrangement, which will allow a further 14,000 to join its defined contribution scheme, where retirement income is based on fund performance rather than salary and length of service.
Whitbread, which owns the Premier Inn hotels at Ainley Top and Brighouse as well as the Brewers Fayre restaurant and Costa Coffee chains, joins a host of major firms closing their final salary schemes to existing members.
Whitbread said the final salary scheme would close to future accruals from the end of this year – a decision that follows a four-month consultation period. It had already shut the fund to new members in 2002.
The final salary scheme had a deficit of £233m at February 26 this year, which marked a mammoth increase on the £33m funding gap seen a year previously. But Whitbread stressed the decision to close the scheme was not related to the pension shortfall.
Lesley Williams, pensions director at Whitbread, said: “The changes will bring the pension benefits across the business into line and ensure that we offer fair pension benefits to all.
“Extending eligibility for the pension fund and improving the level of employer contributions will continue to ensure attractive benefits for Whitbread employees and for those joining the business.”
Other firms to announce plans to shut their final salary schemes in recent months include Barclays and oil giant BP, which has one of the largest pension funds in the UK with about 69,000 members.
Companies have been pulling the plug on their final salary schemes, also known as defined benefit pensions, over the past decade as the liabilities have become too much for them to shoulder.